Layaway: Another Way to Buy

you don’t want to pay with plastic and you don’t have the necessary
cash on hand, you may want to ask a merchant about a layaway plan.
Layaway purchase plans are designed for people who want to buy products
and services without using credit or paying the full price immediately.

When you buy an item on credit, you take the merchandise home with
you. When you use layaway, you typically put down a deposit — usually a
percentage of the purchase price — and pay over time; the retailer holds
the merchandise for you in reserve. You take the merchandise only when
you have paid for the item in full.

It’s important to ask questions about how particular layaway plans
work. Doing a little research on the front end can help you avoid
problems later.

Layaway purchase plans are not limited to brick-and-mortar retail
outlets; some online merchants use them, as well. Some layaway sites
operate like a combination shopping search engine and online shopping
mart: The companies have hundreds of merchants and online retailers
selling name brand items. First, you select a product. Then, you pay:
some sites require electronic debiting from your checking account;
others require that you pay by check or money order through postal mail.
Still others allow you to pay with credit or debit cards, or use online
payment services. Once you’ve paid the balance, the online layaway
service pays the merchant, and the merchant sends you the product.

Some sites offer layaway plans for non-retail items like travel,
tickets to sporting events — even surgery. For example, if you’re
planning a vacation to the Bahamas in six months, or scheduling a
certain medical procedure like plastic surgery in nine months, there are
websites to handle your payment plan.

Get the merchant’s layaway policy in writing. Look for details on:

Check out the business. Contact your state
Attorney General’s Office (, local consumer protection
agency (, and your local Better Business Bureau
( They can tell you if consumers have filed complaints
against the retailer or online service.

Keep good records of the payments you make on layaway merchandise. They may come in handy if you have a problem with the seller.

Layaway plans are not specifically governed by federal law, but
unfair or deceptive sales practices are illegal under the FTC Act. Check
with your state attorney general (, local consumer
protection agency ( Article, and your local Better Business Bureau ( to find out if state or local laws cover layaway purchases.

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